U.S. jobless claims at five-month high; import prices fall

WASHINGTON (Reuters) - The number of Americans filing for unemployment benefits rose to a five-month high last week, but this likely does not signal a deterioration in the labor market as the underlying trend remained consistent with tightening conditions.

Other data on Thursday showed cheaper crude oil and a strong dollar keeping imported inflation pressures subdued in November. The reports did not change views the Federal Reserve will raise interest rates next Wednesday for the first time in nearly a decade.

"As we approach the end of the year, jobless claims have a tendency to be more volatile due to seasonal adjustment issues around the holidays. The message remains that the pace of layoffs is very low," said John Ryding, chief economist at RDQ Economics in New York.

Initial claims for state unemployment benefits increased 13,000 to a seasonally adjusted 282,000 for the week ended Dec. 5, the highest level since early July, the Labor Department said. The four-week moving average of claims, considered a better measure of labor market trends as it strips out week-to-week volatility, rose only 1,500 to 270,750 last week.

Claims have now been below the 300,000 threshold, which is normally associated with healthy labor market conditions, for 40 straight weeks. This is the longest stretch since the early 1970s. As the labor market approaches full employment there is probably little room for further declines.

WEAK IMPORTED INFLATION

U.S. financial markets were little moved by the data. In another report, the Labor Department said import prices fell 0.4 percent last month after decreasing 0.3 percent in October. Import prices have dropped in 15 of the last 17 months, and were down 9.4 percent in the 12 months through November.

Dollar strength and a sharp decline in oil prices have dampened inflation, leaving it running well below the Federal Reserve's 2 percent target.

But there are hopes that labor market tightness will spur faster wage growth and gradually push inflation toward its target. The government reported last week that the economy added 211,000 jobs last month, keeping the unemployment rate at a 7-1/2-year low of 5.0 percent.

Last month, imported petroleum prices fell 2.5 percent after rising 0.4 percent in October. Further weakness is likely following a recent slump in oil prices to seven-year lows.

"We expect import prices to decline further over the medium term as the effects of past dollar appreciation continue to weigh on prices," said Rob Martin, an economist at Barclays in New York. "Ongoing economic weakness in many emerging markets combined with the recent further declines in commodity prices is likely to keep import prices from emerging markets declining for some time."

The dollar has gained 18 percent against the currencies of the United States' main trading partners since June 2014, making imports less expensive. Prices for Chinese imports fell 0.3 percent and were down 1.5 percent over the last 12 months, the biggest year-over-year decline since January 2010. Import prices excluding petroleum slipped 0.3 percent last month after falling 0.4 percent in October. Imported food declined for a third straight month.

The report also showed export prices decreased 0.6 percent last month after slipping 0.2 percent in October. They were down 6.3 percent in the 12 months through November.